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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 683.47

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Nov 28 4:00 PM EST

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To: Johnny Canuck who wrote (34929)	10/27/2001 3:56:42 AM
From: Johnny Canuck	Read Replies (1) of 68423

This commentary indicates another 9 percent to the upside on the SP500, a similar move in the COMPX would give a target of 1940. ************************************ Is CBOE Equity Put/Call Ratio Rolling Over? By Nick Perry (regressionchannels@sir-inc.com) 10/26/2001 3:05 PM ET One of the indicators that I like to keep an eye on is the CBOE equity put/call ratio (EPCR). When the market re-opened in the latter half of September, this indicator registered a string of record-breaking high readings above 1.0. The last single day readings above one were last seen in August and October 1998. In fact, glancing over the data going back to the early 1990s, those are the only days that show a reading greater than 1.0. As you can seen in the chart below, the third week in September saw 4 readings of one or greater. Equity Put/Call Single Day Readings Created with SuperCharts by Omega Research To smooth out the daily fluctuations, you can use a moving average such as a 21-day moving average, which approximates one-month's worth of trading. The theory is that you can use this average to gauge when fear has peak. As this bearish sentiment unwinds, it carries bullish implications. In my opinion, the 21-day moving average of the EPCR appears to have rolled over. Equity Put/Call 21-Day Moving Average Created with SuperCharts by Omega Research This unwinding is occurring at a critical juncture for the S&P 500 (SPX - 1108.62), as it tests its April lows. How low can the 21-day moving average go? As the above chart shows, this average has bottomed near 0.5 twice this year. If this unwinding of sentiment is able to push the SPX through this resistance, I would target a move into the next resistance zone near 1200.

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